Mortgage Backed Securities and their role in the economic crisis Essay

Mortgage Backed Securities and their role in the economic crisis - Essay Example This will normally lead to a fall in the countries’ GDP, a rising and falling of prices because of inflation and deflation and a drying up of liquidity. It normally can take a form of recession or a depression. The economic crisis began with bursting of the united states housing bubble and high default rates on subprime adjustable rate mortgages (ARM),and variable rate mortgages beginning around 2005 to 2006(Wall Street Journal, December 4, 2007). Prior to the crisis, the government policies and competitive pressures encouraged high risk lending practices for several years. The role of Mortgage Backed Securities in the economic crisis The financial crisis was highly felt in the market in 2008. The civil fraud charges was filed against several major credit rating agencies for their role in developing mortgage bond that helped bring about the financial crisis in 2008. The Wall Street Journal reported that the U.S.  Securities Exchange Commission (SEC) is currently looking at t he role these companies played in the crisis and exploring the possibility of holding them accountable. The crisis began to affect the financial sector in February 2007, when HSBC, the world's largest (2008) bank, wrote down its holdings of subprime-related MBS by $10.5 billion, the first major subprime related loss to be reported. During 2007, at least 100 mortgage companies either shut down, suspended operations or were sold. Top management has not escaped unscathed, as the CEOs of Merrill Lynch and Citigroup resigned within a week of each other. As the crisis deepened, more and more financial firms either merged, or announced that they were negotiating seeking merger partners. (Wall Street Journal. Online, May 2008). Credit risk arises because the borrower has the option of defaulting...This paper outlines the role of the mortgage backed securities (MBS) in the surfacing of financial crisis Mortgage backed securities are loans that are normally purchased from mortgage companies, banks and originators and then assembled into groups by a private entity, a governmental or a quasi governmental. The securities are then offered by the entity. These securities are offered through the securitization, that represents the claims on the principal and interest payments made by borrowers on their loans in the group. Most of the mortgages are offered by a U.S. Government agency known as the National Mortgage Association or government-sponsored agencies which comprises of the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association Mortgage bonds or mortgage-backed securities were secured by a mortgage on one or more assets. They are generally backed by real property or real estate holdings. The mortgage bondholder has a claim to the underlying property and can sell it off to compensate for the default if the homeowner paying their mortgage defaults. Economic crisis refer to a situation where the economy of a nation or a country undergoes a sudden downturn which is brought about by financial crisis. The financial crisis was highly felt in the market in 2008 The civil fraud charges was filed against several major credit rating agencies Credit risk arises because borrower has the option of defaulting on the loan one owes. In the real sense, lender is the one who bore the credit risk on the mortgages issued. It was made possible for lenders to sell the right to receive the payments on mortgages they issue through securitization. This led to several risks in the financial sector

Religion Essay Example | Topics and Well Written Essays - 500 words - 10

Religion - Essay Example The idealized, spiritualized essence of God can be comprehended only by refined minds, bent on spiritualism, and only after sustained effort. To the vast majority of mankind, the visible manifestation of God goes a long way towards focusing the inner mind and thoughts on Divinity. This initial, primitive belief that God is only present in that particular picture, or only in that particular form, can, with spiritual growth, metamorphose into the realization that God is an all-pervading, formless entity. Visible forms can be justified as symbolic, spiritual aids to the realization of God. One of the basic tenets of Christianity is the belief that God sent his only son, Jesus Christ, to earth, as the Redeemer to deliver sinful humanity from eternal damnation. Jesus took upon himself the collective sins of humanity and accepted his martyrdom on the cross as the expiation of these sins. This belief probably arises from the primitive belief that the deities must be placated through sacrifice, and the shedding of blood is a prerequisite for absolution. This sacrificial offering, be it the ox of the ancient Romans, or the lamb of the Jews, must be the purest and most perfect to serve the purpose. In this context, the pure, sinless Jesus constitutes the perfect sacrifice in the eyes of God. This ‘substitution theory,’ according to which Jesus’ vicarious punishment redeemed humanity, has a major flaw. If one concedes that Jesus’ punishment has indeed absolved humanity from sin, does it follow that man is now free to sin without having to face the c onsequences of his actions? If Jesus has obtained a prior, blanket absolution for all sinners, this is something in the light of a ‘license to sin’ with impunity. This poses a problem to the acceptance of the substitution theory. The word ‘Christ’ means the ‘Anointed One,’ or the

Ronaldo part of Real's global marketing plan Essay

Ronaldo part of Real's global marketing plan - Essay Example Florentino Perez, director of the club, even admits it in the article: "One of the most important things for Real is its image". In this context the investment of US$44.25 million to transfer Ronaldo from his former Italian club Inter Milan seems nothing in regards of the foreseeable benefits of the arrival of the player. Perez adds: "We will begin selling shirts bearing the player's name immediately and we are sure there will be a massive demand. In five years we want to be in every country in the world." The statement proved to be true the very day Ronaldo signed his contract with Real Madrid. The player went to sign his shirt at the Real's boutique and broke all the records of soccer shirts sales in a day. A Ronaldo shirt costs 75 a piece. No Surprise Perez believes he will get his money's worth. Florentino Perez' strategy is obvious. He brings soccer stars from all around the world and offers them to the public. Who doe not want to see the best players of the world put together in a "dream team" Thus the skyscraping benefits of the shirt sales. However products with the Real Madrid logo are not the only source of major income for the club. With the arrival of Ronaldo, the team signed a commercial agreement with Siemens to bear the name of the mobile firm company on the team's shirt. The market share of Siemens has grown from 17% to 21% in one year.

Green Initiatives Essay Example | Topics and Well Written Essays - 1250 words

Green Initiatives - Essay Example The company has an organic growth model that has enabled the company to achieve tremendous growth during the last decade. In 1999 the company served less than 5 million passengers. In the 21st century corporate social responsibility has become an important strategic path that companies follow in order to achieve success. Corporate social responsibility can be defined as alignment of a company’s activities with the social, economic, and environmental expectations of its stakeholders (Sourcewatch, 2009). As a low cost airline the company is automatically complying with the economic expectation of its customers. The company is a member of European Low Fares Airline Association. Ryanair has one of the best environmental records in the airline industry. Ryanair selects aircrafts models for its fleet that have the latest and most efficient engine technologies. This green initiative has helped the company reduced carbon dioxide (CO2) emissions by 45% over the last decade. The firm has further decreased its CO2 emissions during the last 10 years by an additional 10% by optimizing its flight route trajectory. The company does not use flight hopping mechanisms; instead all of its flights are one way destinations directly to the final location. The airline also avoids long taxiing time and holding patterns at primary congested airports (Ryanair, 2009). CO2 emissions are the primary factor that is causing air pollution that leads to the imbalance in the greenhouse effect and global warming. Rising carbon dioxide levels from burning fuel fossils are scientifically linked to sea level changes, snowmelt, disease, heat stress, severe weather, and ocean acidification (Rice, 2008). The company has invested over $17 billion since 1999 in its aircraft replacement program. The aircraft replacement program enabled the company to lower its fuel consumption by 55% between 1998 and 2007

Article Critique - about a Private School Issue

Critique - about a Private School Issue - Article Example Through review and analysis of available literature concerning education, Shaw (2010) shows that education is a bad public good whose inefficiency as well as infectiveness can only be solved by competition from the private sector (education is also a private good). The article began by highlighting an economist’s assumption that at least education is in portion a public good. Since it has spillover benefits enjoyed by people although they do not pay for; and as result they are probable to be ‘free riders’ on the offered education. Under the present (or at least latest) economic theory, there is an assumption that education will be provided sub-optimally. As a result, the likely under-provision has resulted to the support of the concept that government should intervene to offer education. Today, education at all levels (apart from the initial few years after birth); the government substantially provides education almost everywhere in the world beginning with the Un ited States (Shaw, 2010). The design of the study bring into perspective studies that have discovered that the problem inherent in this development is quality of services provided by the government, education inclusive, is always poor. Provision of services by government is categorized as a public good. The government offers many services whose beneficiaries do not pay for. Those beneficiaries have a tendency of becoming free riders. They therefore do not offer the monitoring quality they would offer if they paid directly for the service. Roberts and Simpson (2011) have shown that the professional standing of education board members reflect on the overall state education ranking. This illustrates where the poor quality of the public good partly emanates from in support of this the argument that a public good is a bad public good. Referring to the impact of higher education, the author says that â€Å"contemporary education has stunted a whole person’s

Freud and Jung- the Unconscious Essay Example for Free

Freud and Jung- the Unconscious Essay The unconscious is hypothetically a region of the mind that contains desires, recollections, fears, feelings and thoughts that are prevented from expression in the conscious awareness. One of the most influential philosophers who made theories about the unconscious and its aspects is of Sigmund Freud. Freud distinguished between three different concepts of the unconscious: descriptive unconsciousness, dynamic unconsciousness, and the system unconsciousness. The descriptive unconsciousness refers to all those things in mental life in which people are not instinctively aware of. The dynamic unconsciousness refers to mental processes and contents, which are removed from the consciousness as a result of contradictory attitudes. The system unconsciousness indicates the idea that when mental processes are repressed, they become organized different from those of a conscious mind, such as displacement. Freud eventually abandoned of the system unconscious and replaced it with the ego, super-ego, and id concepts. Throughout his career, however he retained the descriptive and dynamic concepts of unconsciousness. Freud also believed that the unconscious was a storage facility for all repressed sexual desires. With this in mind, he created a theory called The Oedipus Complex. The Oedipus complex is a theory, which implies hatred and a death wish for the parent of the same sex (father for boys and mothers for girls) and love/sexual attachments towards the parent of the opposite sex. Freud states that at some point, the child realizes the differences between their mother and their father. With this, the child learns to understand gender because they come to grasp that they are similar to one of the parents and different from the other. When the child finally comprehends this, he/she feels as though the opposite sex is affectionate to another person besides them (their same sex parent). Thus, the child â€Å"competes† with the same sex parent for the opposite sex parents love and fondness. Freud believed that these feelings are deeply fused into the unconsciousness of every person, but are suppressed. Another influential philosopher who gathered theories on the concept of unconsciousness is Carl Jung. Jung studied under Freud, but eventually broke off and made his own theories and opinions about different concepts, such as the unconscious. Jung believed that there were two levels of unconsciousness: personal unconscious and collective unconscious. The personal unconscious is interior to the ego (a person’s conception of themselves) and corresponds to a mix of Freuds unconscious and preconscious. Containing elements of the outside world and of personal experiences repressed by the ego, the contents of the personal unconscious can be accessed by therapy, art and cultural expression. According to Jung, the collective unconscious is part of a person’s unconscious that is common between all human beings as opposed to personal unconscious, which is unique to each individual. Jung also believed that the collective unconsciousness contains archetypes, which are forms or symbols that are apparent by all people of all cultures. The five main archetypes that were associated with the collective unconscious are the persona, animus, anima, shadow and self. The persona is the mask presented by each individual to society but it may or may not conceal the real personality. The anima is the feminine part of a man, which evolves as a result of a mans experience with women but also recognizes the bisexual nature of all human beings. The animus is the masculine part of a woman. The shadow is the reverse of the outward personality we show to the world. The self is the most important archetype and holds all the other systems together. With these archetypes, Jung felt that we should know ourselves from the inside as well as the outside. Both Jung and Freud’s theories on the unconscious differed in many ways. Freud described the unconscious as a container underlying the conscious mind, whose task is to contain unwanted and un-encountered events, feelings, thoughts and experiences of the disliked conscious mind. Jung however added to this theory by proposing two layers of the unconscious: a personal unconscious, right under the conscious mind, taking in personal psychic contents and the collective unconscious which contains the accumulating experience of all humanity. Another theory that both Jung and Freud had different opinions on was sexuality. In Freud’s speculation, he claims the force of life is driven by sexuality and the original unconscious contains nothing but feelings, thoughts, experience and frustrations of resulting unhappy sexual desires. Jung however believes there is much more to life than sexuality, which underlies the process of individuation and constant search for meaning. Jung also thinks the unconscious has a compensatory regulating function, aiming at healing and growth. In conclusion, I personally favor Jung’s version of the unconscious mind rather than Freud’s. I feel as though Jung has a better understanding of the human mind in many ways that everyone can benefit from. Although Freud had good theories and speculations about the unconscious mind and sexuality, I did not grasp a connection between my thoughts and Freud’s speculations. With that being said, I can definitely understand why the mind is very difficult to study. Work Cited 1. Wikipedia, the free encyclopedia: â€Å"The Collective Unconscious† 6 October 2008 http://en. wikipedia. org/wiki/Collective_unconscious 2. C. John Holcombe: â€Å"Carl Jung† 10 October 2008 http://www. textetc. com/theory/jung. html 3. Benjamin Nagari: â€Å"Freud vs. Jung† 10 October 2008 http://www. hypnojung. co. uk/freud-jung. htm 4. Collective Unconscious, Microsoft ® Encarta ® Online Encyclopedia 2008 http://encarta. msn. com  © 1997-2008 Microsoft Corporation. All Rights Reserved.

Nine Major Regulatory Bodies Essay Example for Free

Nine Major Regulatory Bodies Essay 1. The Internal Revenue Service (IRS). The IRS was established in 1913. Its purpose is to administer and enforce the internal revenue laws. Its stated mission is to provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. (Internal Revenue Service, 2008) 2. Securities and Exchange Commission (SEC). The Securities and Exchange Act of 1934 created the Securities and Exchange Commission (SEC) to regulate the securities market. â€Å"The mission of the U. S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation†(U.S. Securities and Exchange Commission, 2008) 3. Financial Accounting Foundation (FAF). The Financial Accounting Foundation (FAF) is a private sector organization that formed in 1972 to create standards for financial accounting. Its mission is to â€Å"establish financial accounting and reporting standards through an independent and open process, resulting in financial reports that provide decision useful information† (Financial Accounting Foundation, 2008) 4. Financial Accounting Standards Board (FASB). The (FAF) formed the (FASB) in 1973 to set up standards for nongovernmental accounting and reporting. The mission of (FASB) is â€Å"to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information (Financial Accounting Standards Board, 2008) 5. Governmental Accounting Standards Board (GASB). The Governmental Accounting Standards Board was organized in 1984 by FAF to generate GAAP for state and local governments. The mission of the GASB is to establish and improve standards of state and local government accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the, including issuers, auditors, and users of those financial reports. (Governmental Accounting Standards Board, 2008) 6. Federal Accounting Standards Advisory Board. The (FASAB) was established in 1990 by the U.S. Secretary of the Treasury, the Director of the Office of Management and Budget, and the Comptroller General to produce GAAP for the federal government. The mission of the FASAB is to promulgate federal accounting standards after considering the financial and budgetary information, needs of citizens, congressional oversight groups, executive agencies, and the needs of other users of federal financial information. (Federal Accounting Standards Accounting Standards Advisory Board, 2008) 7. International Accounting Standards Board (IASB) Since its inception in 2001 the (IASB) has created global GAAP and standards. The mission of the (IASB) â€Å"is to develop, in the public interest a single set of high quality, understandable and international financial reporting standards (IFRS’s) for general purpose financial statements† (International Accounting Standards Board, 2008) 8. Public Company Accounting Oversight Board (PCAOB) The Sarbanes-Oxley Act of 2002 (SOX) established the Public Company Accounting Oversight Board to issue auditing standards for public auditing firms. The mission of the PCAOB is to oversee the auditors of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, fair, and independent audit reports (Public Company Accounting Oversight Board, 2008) 9. American Institute of Certified Public Accountants (AICPA) The American Institute of Certified Public Accountants was born in 1887. The mission of the (AICP) â€Å"is to provide members with the resources, information, and leadership that enable them to provide valuable services in the highest professional manner to benefit the public as well as employers and clients† (American Institute of Certified Public Accountants, 2008) References American Institute of Certified Public Accountants. (2008). AICPA Mission. Retrieved November 20, 2008, from http://www.aicpa.org/About+the+AICPA/AICPA+Mission/ Federal Accounting Standards Advisory Board. (n.d.). Welcome to the Federal Accounting Standards Advisory Board. Retrieved November 20, 2008, from http://www.fasb.org/facts/ Financial Accounting Foundation. (n.d.). FAF Strategic Plan. Retrieved November 20, 2008, from http://www.fasb.org/faf/Strategic_Plan.shtml Financial Accounting Standards Board. (n.d.). Facts About FASB. Retrieved November 20, 2008, from http://www.fasb.org/facts/ Governmental Accounting Standards Board. (n.d.). Retrieved November 20, 2008, from http://www.gasb.org/. Internal Revenue Service. (n.d.). The Agency, its Mission and Statutory Authority. Retrieved November 20, 2008, from http://www.irs.gov/irs/article/0,,id=98141,00.html International Accounting Standards Board. (n.d.). About Us. Retrieved November 20, 2008, from http://www.iasb.org/About+Us/International+Accounting+Standards+Board+-+About+Us.htm Public Company Accounting Oversight Board. (2008). Our Mission. Retrieved November 20, 2008, from http://pcaobus.org/ U.S. Securities and Exchange Commission. (2008, November 7). The Investors Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. Retrieved November 20, 2008, from http://www.sec.gov/about/whatwedo.shtml